Rep. Anne Donahue

Legislative Update

January 20, 2008

You, the electorate, send we, the elected, to make very big decisions on your behalf about what you contribute to and gain from the entity we call our government.

Sometimes, it’s about significant public policy. More often it’s about money, and the money ends up driving our policy choices. This session, that will be true more than ever, with a 50-50 projected odds of a recession looming over every decision.

The current revenue forecast will allow roughly 40 million more in expenses than the current fiscal year. Funds already committed (the $7.5 million to buttress Catamount Health, for example) will leave us at $1.5 million -- in other words, at essentially a “cost-neutral” budget.

As we all know from our home budgets and our school budgets, cost-neutral when forced expenditures on fuel or health care can’t be avoided actually means cutbacks elsewhere. [That was pointed out very effectively at a school board consortium that included Northfield and Roxbury that I attended this past week.]

However that does not even include some of the largest other “must do” state budget pressures:

- the negotiated Pay Act for state employees (which the legislature does not control);

- the $15 million additional Medicaid cost growth (while still shifting the same huge proportion of that program’s costs onto everyone’s health insurance premiums);

- the growing Corrections budget, and shortfalls in human services (we just failed a federal review of adequacy of our response to abused children); and

- funding for bridges and highways.

It also doesn’t address any new funding for very high public policy issues, such as expansion of Catamount Health to small employers, or investments in heating efficiencies that will both save fuel costs and cut greenhouse gasses.

This Tuesday, the governor will address where he believes the priorities must be, and the legislature will spend the next several months sorting through that budget and making its own priorities for negotiation.

No matter how pressing needs may be, raising taxes would be highly counterproductive in a struggling economy and for struggling families. Average income in the past five years has been almost flat or dropped for those making under $60,000 per year.

The wealthier have gained substantially, but at their higher tax rates, it has been the key factor to keeping the budget afloat. Those two percent of Vermonters with the very highest income pay the highest percent of income, producing 37 percent of our income tax revenue.

My committee has begun to review some of the impacts budget reductions will have, but we will have little ability -- given the financial situation -- to do much more than be a source of education for the public. Many see Vermont as a high end state for public supports, without understanding some of the larger impacts.

For example, the sky rocketing increases in corrections: Little known is the fact that we have the one of the very lowest rates of incarceration in the country, probably significantly affected by the early interventions we provide.

When people work (as our “wefare to work” so successfully promotes), they need child care, and good child care is essential to brain gowth and prevention of educational problems (read: special education costs); failure in school increases likelihood of ending up in corrections. Our child care subsidy amounts and rates have not changed since 1996.

For the elderly who wish to stay at home, our nationally renowned “Choices for Care” waiver now has its first waiting list. Not getting that help in home support means reverting to nursing home care at a far higher price a short time down the line.

There has only been one unanimous theme among all the disjointed attempts at planning for closing the decertified Vermont State Hospital: that our community mental health programs are critical to reducing the need for inpatient care, and for the number of very high-cost replacement beds.

We are one of the top per-person spenders in the country on community mental health, and one of the lowest in per-person inpatient beds. That’s connected.

This past week, a consultant report to our committee presented three scenarios: Increase funding by 13 percent, and the growth in need could be met; by eight percent, and the same number of persons could be served but unmet demand would increase; by 3.3 percent and those served would be reduced by 10 percent, and “correctional and inpatient psychiatric costs would rise beyond the savings achieved.” Yet even a 3.3 percent raise would contrast sharply with the cost-cutting that will be needed in much of the budget.

Similarly, some members of the Senate proposed this week that investment in community substance abuse group homes could reduce the out-of-control corrections budget. But the reduction would not be immediate, and the new costs would be. We become forced into being even more short-sighted than usual.

In neither of those areas are welcoming communities jumping forward to welcome new programs for their fellow Vermonters. As we saw in the news last week, even homeless shelters are being fought. Last fall, St. Johnsbury neighbors opposed a two-bed crisis diversion program that was preventing persons with a mental health crisis from ending up in the hospital (even as we fight increasing Medicaid and other health care costs.)

Two years ago a new work camp for low risk offenders was approved in the budget: something that, if open now, would already be helping ease the corrections budget. Northfield was one potential site but there was immediate opposition, and no other community has yet accepted it. There are obstacles to some solutions than are not just about how much money we have available.

I will keep you up-to-date more briefly as the session progress, but that is the big picture of our state’s finances. The full economic report presented to legislators this past week (the Joint Emergency Board Presentation) is available on the web at www.leg.state.vt.us, under “Joint Fiscal Office” (in the right column.)

In the smaller scope, I will try to keep you aware of key bills, and I welcome checking for you on the status of other bills of interest.

The most immediate non-state budget issue that my Human Services Committee is currently addressing is the housing lead hazards bill.

Given the increase in knowledge about the effects of even low lead levels in the brains of developing children (as much as 2 to 3 points in intelligence capacity as measured by IQ), the bill increases enforcement and broadens the reach of measures required of landlords.

It also extends the requirements of contractor safe work practices to all homes, whenever more than a square foot of material is being disturbed. This includes not just lead paint, but levels from any cause, including in soil surrounding a home.

As usual a balance of interests are in competition. So many threats to health surround us. How far can we go in reducing or eliminating every one? How far should this one go, in costs to landlords, which translate into costs of affordable housing, which is in turn one of our critical Vermont shortfalls.

The head of the Central Vermont Chamber of Commerce told legislators at its forum two weeks ago that in Washington County in the past ten years, wages, on average, have gone up 17 percent while housing costs have increased 75 percent.

Where, among the competing needs, does that fall?

Please share your own thoughts, expertise and values through this session as we grapple with an economic downturn and the needs of our neighbors. I can represent you best when I know what is important to you. You can leave messages anytime via counterp@tds.net, 485-6431, or at the statehouse at 828-2228.